Economy fears prevent property market ‘bounce’

SLUMP The property market is still flat
SLUMP The property market is still flat
Jacquie Shaw of the NMRN

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FEARS over the economy and lack of mortgage finance are continuing to depress the housing market, new figures have revealed.

A hoped-for spring ‘bounce’ in the region’s housing market failed to materialise during May, says the RICS UK Housing market survey, released today.

The survey says that while the average number of completed sales, as recorded per surveyor, stabilised in the three months to May, the figure itself remains low at just 15 properties per month.

Meanwhile, the average number of stocks per surveyor increased slightly to 47, as more properties came to market and many stayed on surveyors’ books for longer.

The figures mean the sales to stock ration – an indicator of the balance between demand and supply – fell to 32 per cent for the period, from 36 per cent recorded previously.

RICS housing spokesman, Ian Perry, commented on the survey’s regional data.

He said: ‘Buyer interest in purchasing property remains flat across much of the south east.

‘Meanwhile, uncertainty over the economic outlook remains at least as important as the availability of mortgage finance in depressing demand.

‘On the other hand, the appetite to rent is continuing to grow in the region.

‘And with little new supply coming on to the lettings market, the cost of renting is increasing and looks likely to continue to do so.’

During May, the market in the south east saw signs of a stabilisation in demand for property, and two per cent more surveyors reported rises in new buyer enquiries.

Many surveyors in the region cited the bank holidays for the low levels of demand. Meanwhile, new vendor instructions continued to rise.

In terms of house prices in the south east, 13 per cent more respondents expected prices to fall rather than rise over the next three months. Despite this, surveyors’ expectations for future sales remain positive.

Clive Rutland, of Rutland Chartered Surveyors, said: ‘The market is still subdued but there are signs of a change in the sentiment of purchasers with investors back in the market and very early signs that the lending institutions are not quite so difficult.’